Began its days in Liverpool, UK as a games publisher for platforms such as the Apple II, Macintosh and C64. As one of the pioneers of the Amiga games industry, Psygnosis was arguably responsible for selling more Amiga computers than any other publisher with their releases of SHADOW OF THE BEAST and LEMMINGS.

Psygnosis was acquired by Sony in 1993, which resulted in much of their attention being diverted from the Amiga to development of proprietary 3D graphics technology and CDROM games in preparation for an assault on the console and PC markets. Psygnosis' efforts would be rewarded when they were handed a major role by Sony in the launch of the PlayStation in 1995.

In 1998, Eidos purchased Psygnosis' European operations, while their U.S. operations were absorbed by Sony's own development outfit 989 Studios. The Psygnosis label was eventually abandoned by Sony in 2000.